Month: August 2024

The Securities and Exchange Commission has approved the launch of MSTX, the first leveraged single-stock ETF targeting MicroStrategy. The ETF will seek to deliver 175% of MicroStrategy’s stock’s daily return.

JUST IN: 🇺🇸 SEC approves the first leverage long MicroStrategy ETF. pic.twitter.com/9NYrLh81sD

— Bitcoin Magazine (@BitcoinMagazine) August 15, 2024

MSTX is issued by Defiance ETFs, which focuses on thematic and leveraged ETFs. According to Defiance CEO Sylvia Jablonski, the leveraged MicroStrategy ETF offers amplified exposure to Bitcoin since MicroStrategy is one of the largest corporate holders.

As of Q2 2024, MicroStrategy held about 226,500 Bitcoin on its balance sheet. The company took on debt to acquire most of its Bitcoin, making the stock a leveraged Bitcoin play in itself.

Jablonski said, “Given MicroStrategy’s inherent higher beta compared to bitcoin, MSTX offers a unique opportunity for investors to maximize their leverage exposure to the Bitcoin market within an ETF wrapper.”

Leveraged ETFs pursue daily investment objectives, meaning performance is amplified daily but varies over longer periods. MSTX carries added risks from using leverage and concentration in a single stock.

Senior ETF Analyst for Bloomberg, Eric Balchunas, commented on X that a leveraged MicroStrategy ETF “will be the most volatile ETF you can get in the US market.”

The SEC has recently allowed leveraged single-stock ETFs after years of rejecting proposals. GraniteShares and Direxion also have approval for 3x leveraged Tesla and Apple ETFs, respectively. However, leveraged equity ETFs remain a small niche, accounting for less than 1% of overall ETF assets.

Defiance hopes MSTX can break out from the pack with the Bitcoin link. But the first-of-its-kind ETF’s ultimate success will depend on investor reception and MicroStrategy’s performance as a Bitcoin proxy.

Marathon Digital Holdings, one of the largest publicly traded Bitcoin miners, purchased $249 million more worth of Bitcoin. This latest acquisition expands Marathon’s corporate bitcoin treasury to over 25,000 BTC.

JUST IN: 🇺🇸 Marathon Digital Holdings buys 4144 #Bitcoin worth $249 million.
pic.twitter.com/PnMm9RLuev

— Bitcoin Magazine (@BitcoinMagazine) August 14, 2024

On August 12th, Marathon announced a $250 million convertible note offering to raise funds for Bitcoin purchases. The notes were met with strong demand, allowing Marathon to upsize the deal to $300 million.

The company then used $249 million of the proceeds to accumulate 4,144 additional Bitcoin at an average price of $59,500 per Bitcoin. This boosts Marathon’s Bitcoin reserves to over 25,000 BTC worth nearly $1.5 billion.

In July, Marathon bought $100 million of Bitcoin on the open market as part of its long-term “hodl” strategy. The Nasdaq-listed miner aims to hold newly mined coins rather than sell them.

Marathon is aggressively expanding its Bitcoin stash by mimicking MicroStrategy’s corporate playbook. Other firms, such as Semler Scientific and Metaplanet, are also raising money in debt markets to buy more Bitcoin and ride its adoption curve. 

These savvy public companies are using the fiat system’s cheap lending rates to accumulate scarce Bitcoin. This demonstrates Bitcoin’s growing conviction that it is the best strategic reserve asset for public companies. 

A recent analysis from Bitcoin Magazine Pro showcases the power of dollar-cost averaging (DCA) in Bitcoin compared to traditional assets like gold, Apple stock, and the Dow Jones Industrial Average (DJI). The data reveals that consistently investing $10 weekly into Bitcoin over the last five years would have grown a total investment of $2,620 into $7,913.20, reflecting a remarkable 202.03% return.

In contrast, the same $10 weekly investment in gold yielded a return of 34.47%, growing the initial $2,620 to $3,523.06. Apple stock also performed well, with a 79.13% return, turning the $2,620 investment into $4,693.13. Meanwhile, the Dow Jones provided the least return, with a 23.43% increase, growing the investment to $3,233.94.

This data underscores Bitcoin’s potential to be one of the best assets, if not the best asset, for investors to incorporate into their long-term investment strategies. The principle behind dollar-cost averaging—regularly investing a fixed amount of money regardless of price fluctuations—has proven particularly effective with Bitcoin, allowing investors to accumulate wealth over time.

Saving $10 a week into Bitcoin through Dollar Cost Averaging (DCA) offers an affordable and accessible way for newcomers to start investing in Bitcoin. This strategy is especially appealing for those who may be hesitant to invest large sums upfront or are still learning about the volatile nature of the Bitcoin market. By investing a small, fixed amount regularly, individuals can gradually build their Bitcoin holdings, reducing the impact of market fluctuations and making it easier to adopt a long-term investment mindset. This approach allows for consistent growth over time, without the pressure of trying to time the market perfectly.

The Dollar Cost Average Strategies tool from Bitcoin Magazine Pro allows users to explore various investment strategies, optimizing their Bitcoin investments across different time horizons. The tool compares Bitcoin’s performance against other assets like the US dollar, gold, Apple stock, and the Dow Jones, illustrating Bitcoin’s potential as a superior store of value in a well-rounded investment portfolio.

For more detailed information, insights, and to sign up to access Bitcoin Magazine Pro’s data and analytics, visit the official website here.

Bitcoin continues to provide a massive breakthrough in the digital age by allowing people to transact between each other without third parties. Bitcoin Magazine covered Silent Payments over two years ago to shed light on one of Bitcoin’s shortcomings: privacy. It was a problem then and it still is today…as stated:

“…a push based payment system (no one is allowed to “pull” payments from you, you have to explicitly authorize them yourself and “push” them to other people), Bitcoin requires the sender to have the information necessary to define the destination for money they send. This requires the recipient communicating to the sender their Bitcoin address in one way or another. In the case of trying to raise money from the general public, this has massive consequences in terms of privacy or needing to maintain a constant interactive presence online. Anyone is totally capable of simply posting a single Bitcoin address somewhere online, and from that point, anyone who wishes to send money to that person can simply do so, but there is no privacy in raising money in this way. Simply take that address and look it up on the blockchain, and you cannot only see how much money that person has been sent, but you can see the footprint on the blockchain of everyone who has sent them money. Both the person attempting to raise funds and everyone who has donated to them have no privacy whatsoever; everything is completely open and correlated for the whole world to see.”

Before Silent Payments, the only alternative was to reuse addresses on a per-contact basis to protect your privacy, or to run a server that offers a new address every time someone requests to send you money. Neither of which are usable or scalable option for most users, reserving privacy for a privileged few who knew how to achieve privacy. Fortunately, the community has made massive progress since then, with the release of Silent Payments.

BIP352 (Silent Payments)

After much discussion on how to implement the feature as efficiently as possible, BIP352 is now a reality. When someone wants to receive money privately, lets say an activist organization, they can post their Silent Payments address on their site instead of a traditional Bitcoin address. Now, when a user wants to send the organization money, they use a Silent Payment address within a supporting wallet. This will automatically use the unique public key attached to the Silent Payment address, combined with the public keys of the outputs they want to send to generate a brand new, single-use address that looks like any other Bitcoin address. It sounds complicated, but all of this functions behind the scenes. All a user needs to do is paste the address and send money to it, just like any other address. There are many benefits:

1) The organization itself only has to post a single address on its site to still receive the benefit of generating new addresses for every transaction.

2) The user sending money to the organization can always reference the same static address, making it easy for them to continually send money without needing to track multiple addresses.

3) If the same user continually gives money to the same Silent Payments address, a new Bitcoin address is generated each time, so the sender doesn’t need to worry about the receiver knowing it’s the same user sending them money.

4) The receiver gains massive privacy benefits as users are not able to easily look into the funds of their wallet and see who else is sending them money.

5) The addresses that are generated to transact between both users appear like any other Bitcoin transaction, meaning use of the feature is obfuscated to outside parties.

6) No server is required. Any wallet that supports Silent Payments handles all this technology locally within the wallet.

To summarize the benefits: With Silent Payments, any person or organization can now opt to using a static Silent Payments Bitcoin address in place of their traditional static address to not only have better privacy for themselves, but it also protects people trying to send them money by ensuring not even they as receivers can snag information about senders. With Silent Payments, the sender and receiver gain a massive layer of privacy, while still largely benefiting from the power of the underlying Bitcoin protocol to give them the freedom to transact as they please.

With that said, there are drawbacks. The first is a direct result of the benefit of not needing a dedicated device online to facilitate the transactions. Users will need to scan through blockchain transactions to detect payments made to them. This scanning can take time, but it comes with massive privacy benefits for both users. Over time, performance of scanning can also be improved to make this less of an issue for users.

The second issue is one of adoptability, since Silent Payments are new with wallet support being fairly limited at the time of writing. Both the sender and receiver need to use a wallet that offers support for the feature. silentpayments.xyz is a resource that shares which wallets support Silent Payments, the first of which

to currently have full support being Cake Wallet. If the community hopes to see wider adoption of Silent Payments, wallets need to integrate the functionality to offer more users the privacy benefits provided by Bitcoin Silent Payments.

Overall the idea of protecting user privacy through the native Bitcoin protocol is an important one that can offer user privacy without jeopardizing what makes Bitcoin, Bitcoin. In fact, the privacy benefits of Silent Payments strengthen the fundamental beliefs of the Bitcoin community by offering users the freedom to transact with better privacy if they choose to.

This is a guest post by Henry Fisher. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The State of Wisconsin Investment Board (SWIB) has increased its investment in BlackRock’s iShares Bitcoin Trust (IBIT), according to a new SEC filing today, as first reported on X by MacroScope. 

In an SEC filing today, the State of Wisconsin Investment Board reported owning 2,898,051 shares of the iShares Bitcoin Trust as of June 30 (valued at $98.9 million as of that date).

This is an increase from the 2,450,400 shares that Wisconsin previously reported in May.…

— MacroScope (@MacroScope17) August 14, 2024

As of June 30, the board owns 2,898,051 shares, valued at $98.9 million. This marks a substantial increase of 447,651 shares from the 2,450,400 shares reported in May. Notably, the filing also revealed that the board no longer holds any position in the Grayscale Bitcoin Trust (GBTC), a change from May when it reported holding 1,013,000 shares. 

Earlier this year in May, SWIB became the first state pension to buy spot Bitcoin ETFs, signaling a another big milestone in the integration of Bitcoin into traditional investment portfolios. The board’s decision to increase its investment in IBIT highlights a growing preference for direct Bitcoin exposure through spot ETFs, reflecting broader institutional confidence in Bitcoin’s long-term potential. 

Despite the recent downward price action in Bitcoin, money continues to pour into the spot Bitcoin ETFs, with a total combined inflow of $243.06 million since July 24.

U.S. 🇺🇸 Bitcoin Spot ETFs 👇 2 consecutive days of inflows pic.twitter.com/8txUOkdT61

— HODL15Capital 🇺🇸 (@HODL15Capital) August 14, 2024